Mechel Announces Closure of Deal on Disposal of Toplofikatsia Rousse EAD
MOSCOW, July 8, 2013 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL), one of the leading Russian mining and metals companies, announces the closure of the deal on disposal of 100% of the shares of Toplofikatsia Rousse EAD (TPP Rousse, Bulgaria).
According to the sale&purchase agreement, signed in December 2012, 100% of Toplofikatsia Rousse EAD's shares were sold to Toplofikatsia Pleven, a privately-held Bulgarian power company. The disposal is valued at approximately 29 million euro based on the asset's equity value. The agreement also stipulates that Toplofikatsia Rousse EAD's debt to Mechel Carbon for historical coal deliveries in amount of 18.8 million US dollars will be repaid.
VTB Capital and UniCredit Bank acted as financial advisors and CMS as legal advisor to Mechel OAO in this transaction.
In 2012 TPP Rousse generated 364 GWh of electricity and 235 Gcal of heat power, which resulted in 56.8 million lev in revenues and -3.1 million lev in EBITDA. As of 31 December 2012 TPP Rousse had some 300 employees.
Commenting on the event, Stanislav Ploschenko, Mechel OAO's Chief Financial Officer, noted: "The disposal of TPP Rousse is the second deal for disposal of the Group's non-core assets that has been completed this year. Apart from financial gain from this asset's disposal, this deal will enable our management to focus on its business priorities — consolidating the group's leading position as a metallurgical coal producer, strengthening its positions in steel products for construction and increasing its share on the markets for high value-added steel products. The transaction was made in line with the program for restructuring the group's assets as earlier approved by Mechel OAO's Board of Directors. The funds from this sale will be used to repay the Group's debts."
Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These documents contain and identify important factors, including those contained in the section captioned "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in our Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.
Contact
Mechel OAO
Elena Andreyeva
Tel: +7 495 221-88-88
Elena.andreeva01@mechel.com
